Industry

MotorCycle Holdings Limited Aquire Mojo Group

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MotorCycle Holdings Limited (ASX: MTO), Australia’s largest motorcycle dealership operator, is to acquire 100% of the shares in Mojo Motorcycles Pty Ltd and Mojo Electric Vehicles Pty Ltd (together Mojo Group).

Mojo Group is a motorcycle, scooter, ATV, electric motorcycle, and genuine spare parts and accessories importer and distributor operating in Australia and New Zealand, with a 150-strong dealer network. Mojo has popular brands such as Sherco, Kymco and CFMOTO under its umbrella to name a few. It is headquartered in Altona North (Vic) in a purpose-built 5,000-square-metre distribution centre, backed up by a 2,000-square-metre facility in Yatala (Qld) to increase total warehousing capacity to 2,500 vehicles.

MTO will acquire Mojo Group from companies owned by Michael Poynton and Joshua Carter for consideration of up to $60 million on a cash free, debt free basis, comprised of:
• 11.539 million MTO shares2 (escrowed for two years) (Consideration Shares); plus
• $20 million in cash; plus
• deferred consideration of up to $10 million3

MTO will fund the cash component of the consideration through an increase to its debt facility.

The acquisition price represents an earnings multiple of 4.1 times Mojo Group’s FY22 net profit before tax, and on a proforma FY22 consolidated basis the transaction is expected to be 18% earnings per share accretive before synergies, integration costs and PPA related amortisation1

The principals of Mojo Group (Michael Poynton and Joshua Carter) will take up senior executive positions with MTO and Michael Poynton will also join the MTO board.

Conditions to completion of the acquisition include MTO obtaining shareholder approval for the issue of the Consideration Shares at the AGM and obtaining key contract and third-party consents.

1 Based on FY22 MTO audited financial statements and FY22 Mojo Group unaudited financial accounts
2 Assumes shares are valued at agreed issue price of $2.60.
3 Where the net profits before tax of the Mojo Group in the 12-month period following Completion are:
• greater than $14.5 million, the deferred consideration will be $10 million;
• equal to or greater than $10 million but less than $14.5 million, the deferred consideration will be $5 million; and
• less than $10 million, the deferred consideration will be $0.

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